Daily Market Commentary 4th August 2021

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US equity markets rebounded strongly, despite a weak lead from Asia, after markets suffered further turmoil due to Chinese Government interference. The Chinese Government attacked the Tech and Education sectors recently, wiping Billions from their market cap, and their new target appears to be Online Gaming Companies. The massive power the CCP holds over entire sectors of the economy is simply unrivalled and dangerous. The Government can destroy any company, they chose and devastate an industry. This has a flow on effect globally, as many of these companies are listed on US bourses, with US investors.

US Factory Orders were positive, but the virus is spreading at an unprecedented pace. The vaccine take-up has apparently reached 70%, so that allays many fears. The effectiveness of the vaccine will tell in time. The US Dollar remained steady, with the EUR trading above 1.1850, while the GBP drifted to 1.3915. EU PPI rose to an annualised 10.2%, which will flow through into cost-of-living pressures and inflation.

The RBA left rates unchanged and QE tapering in place for September. The RBA bushed off the wave of lock-downs across Australia, confident that the strong economic recovery would continue. The AUD Dollar jumped above 0.7400 following the announcement, but later settled back below, while the NZD regained 0.7000 despite weaker Global Dairy Prices. Attention will begin to focus on the US employment numbers, culminating in Non Farm Payrolls, on Friday.

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